The Goods and Services Tax (GST) is a value added tax that will replace all indirect taxes levied on goods and services by the Government, both Central and States, once it is implemented.
The GST is a consolidated tax based on a uniform rate of tax fixed for both goods and services. All goods and services, leaving aside a few (alcohol, tobacco, petroleum products), will be brought into the GST and there will be no difference between goods and services. The GST rate is expected to be around 14-16 per cent.
Introduction of a GST is very much essential in the emerging environment of the Indian economy. In the GST system, when all the taxes are integrated, it would make possible the taxation burden to be split equitably between manufacturing and services. It will also help to build a transparent and corruption-free tax administration. There are certain bottlenecks which need to be taken care of before that: What preparations are needed at the level of Central and State Governments for implementing the GST? Whether the Government machinery is efficient enough for such an enormous change? Whether the tax-payers are ready for such a change?
According to a study by the National Council of Applied Economic Research (NCAER), full implementation of the GST could expand India's growth of gross domestic product by 0.9-1.7 percentage points. By implementing the GST, India will gain $15 billion a year. It will promote more exports, create more employment opportunities and boost growth.
GSTN the Goods and Services Tax Network:
Along with GST there are a number of reforms that the Government is bringing in to strengthen the manufacturing bone of India.
GSTN, the Goods and Services Tax Network is being setup with the objective to provide the requisite IT infrastructure and services for the proper roll-out and implementation of GST.
It is a company under Section 25 which implies that its is a non government, private limited company which will not work for profit.
The division of powers is such that the Central Government holds 24.5% equity in GSTN while the states inclusive of NCT of Delhi and the union territory of Puducherry and the Empowered Committee of the State Finance Ministers collectively hold another 24.5%, the remaining 51% vests with other Government financial institutions.
This company will work towards providing a proficient GST Eco-System. It will encourage and collaborate with GST Suvidha Providers to roll out GST applications for providing simplified services to the stakeholders.
It is also entrusted to carry out research in order to conclude better and best practices and to indulge in staff training and also consultancy to the Tax Authorities and other stakeholders.
Another very important feature of the GSTN is to develop Tax Payer Profiling Utility which is a very important aspect in ensuring efficient administration and achieve the GST goals.
GST Council
This is the most important aspect of the Goods and Services Tax, in ways bigger than the GST bill too, as the entire structure of GST is contingent on this foundation.
It is an apex body headed by the Union Finance Minister Mr. Arun Jaitley with the State-nominated ministers and the Union Minister of State for Finance( In charge of Revenue) as members.
It is imperative to note that the decisions of the GST Council will shape whether this ambitious tax reform will achieve its due desired effect or not.
*.*.*.*.*
**** END ****